Please attach references at the end and include citations and also follow this guide.
Paragraph 1 (120 words, 2 citations)
• Define what is performance measurement in the management of business performance – citation. It is the process of using financial and other tools to
assess/gauge the achievement of business objectives to determine areas for corrective action and improvement – see Gates’(1999) citation.
• Outline the role of performance measurement in the management of business performance – citation. Can be used to determine areas for improvement ,
rethink management plans, holding staff accountable etc. Cite the works of Nikolaos Otheitis and Martin Kunc (2015)
• Make a judgement on what performance measurement systems are used in the management of business performance in your business eg. Traditional
Financial ratios etc. Provide evidence to justify. (thesis statement)
• Outline 3 roles and benefits of these performance measurement systems to your business.
o Some of these roles and benefits include:
Identifies and tracks the achievement of business objectives
By assessing the achievement of business objectives the company can take corrective action or find opportunities for improvement
Can determine which employee or team is responsible for specific business objectives to determine accountability and the need for improvement and/or
bonuses.
By assessing past performance, performance measurement helps the company plan ahead: new targets, new management strategies etc.
• Outline the purpose or structure of the essay.
Paragraph 2(2 citations, 120 words, choose one the of roles to discuss from above)
• Outline that a major role of performance measurement in your business is the tracking of business objectives for achievement – citation
• Explain how it works in your business using an example – citation for the example:
o Business performance objectives may include profit, revenue and growth targets.
o Your business finance department and CEO maybe using a traditional performance measure such as ROCE to determine the return on investments made
for new products, new branches etc.
o Net profit margin and earnings per share maybe calculated annually and used to determine shareholder dividends etc. The company can compare these
figures for various years to determine if the company is declining or improving. Also it can be used to determine the relative profit position of the company
against the industry average.
• Discuss the benefits of example to the business eg. Helps the business to determine its profitability position in relation to its competitors; forces the
company to think how to increase revenue and reduce operating costs; how can the company develop unique products and services.
Paragraph 3(2 citations, 120 words, choose one the of roles to discuss)
• Outline that a major role of performance measurement in your business is taking corrective action to improve the attainment of business objectives and/or
find opportunities for improvement – citation.
• Explain how it works in your company using an example – citation for the example:
o The company with a low net profit margin on their sales may seek ways to reduce operating costs eg. New suppliers, cheaper raw materials, reduce
overheads etc. The margin is calculated by the finance dept which advises the CEO and senior management who then brainstorm the corrective action.
o The company with a low gross profit margin on a new product may seeks ways to reduce the cost of goods sold.
o The company with a low current assets ratio usually cannot afford to pay its current liabilities; as such the company seeks to increase its current assets.
• Discuss the benefits to the business of using performance measurement systems to assess business objectives to take corrective action and/or find
improvements.
Paragraph 4 (2 citations, 120 words, choose one of the roles to discuss)
• Outline that a major role of performance measurement in your business is linking the achievement of objectives to particular managers, business units or
departments for increased accountability purposes – citation.
• Explain how it works in your company using an example – citation for the example:
o All departments or managers are tasked with reducing operating costs by 7%. Progress reports are mapped to the specific department or manager
responsible. In cases of not meeting targets, managers are spoken to improve with new ideas etc. In this way, individual or department goals are integrated
with the business objectives.
o Sales agents are tasked with increasing sales volume by 10% over a 3 month period.
o Production staff tasked with reducing wastage of raw material by 10% in 2 months. Bonuses may be linked to staff members who are able to meet the
target.
• Discuss the benefits of the example to the business eg. The business is able to meet its targets by vertically linking employee targets to business targets.
Staff are rewarded via bonuses etc.
Paragraph 5 (80 words)
• Summarise the major roles and benefits of performance measurement systems.
• Suggest ways the use of performance measurement systems can be improved in your organisation:
o Clearly communicate which measurement systems will be used eg. Traditional financial measures
o Training all staff to use and assess the data it produces; not only finance staff.
o The company can compare/benchmark its measurement systems to its competitors to determine if the same measures are being used and their impact on
business performance
o Consider a more modern day tool to measure business performance, the balance scorecard.
Citation to use: Vanja Bevanda, Giorgio Sinkovic’ and David M. Currie (2011), “Implementing a performance measurement system in Croatia”, Measuring
Business Excellence, Vol. 15 Issue: 4, pp. 50–61. (This article will be available in your online student resources.)
Part B:
• 400 word limit
• Topic – role of the balance scorecard approach